Fee Hikes Proposed To Close Budget Gap

Faced with a major decrease in property tax collections and no expected increase in state aid, budget writers in Springfield Massachusetts are proposing scores of fee hikes. But the city's top finance officer says it still won't be enough to avoid budget cuts. WAMC's Pioneer Valley Bureau Chief Paul Tuthill reports..

Fees for everything from a dog license to a building permit to weekly trash collections would increase in Springfield under a plan proposed by the city's finance division. The proposals presented to the city council at a meeting Monday would raise nearly $3 million. But, that would still not be enough to cover the projected deficit in the next city budget, according to Springfield's Chief Administrative and Finance Officer Lee Erdman.

City budget writers project a deficit of more than $25 million in the roughly half-billion dollar budget for the fiscal year that starts in July. But they caution that the budget is still being written and there are many variables including the amount of local aid to cities and towns that will be included in the final state budget. Springfield Mayor Domenic Sarno has written the governor and plans to meet with legislative leaders to plead the city's case for an increase in unrestricted local aid and other financial relief.

Erdman said the city has warned its municipal unions that lay offs are possible.

Erdman is recommending city councilors approve increases of $29 per year for the next five years for residential trash collection to eventually make the city's solid waste disposal and recycling program financially self sufficient. The trash fee is currently $75 per household. But the administration also proposed 2 other options for smaller annual increases in the un-popular fee.

Springfield City Council President James Ferrera said council committees will hold public hearings to review the administration's proposals.

Because of plunging property values assessors are projecting a $7 million drop in property tax collections. Finance officials told councilors that the city's cash reserves would be used to cover the shortfall. The city has $37 million in reserves.

City councilor Bud Williams said the city should dig deeper into its cash reserves, or rainy day fund, before raising fees.

City Councilor Timothy Rooke believes budget savings could come from, of all places, health insurance. Rooke is lobbying for the city to solicit bids for health insurance rather than commit to three more years in the state's GIC program.

The Sarno administration is also proposing an increase in the hotel-motel room tax from the current 4 percent local share to 6 percent. It would generate an estimated $400 thousand a year. The same increase was proposed by the mayor in this year's budget, but it was not approved by the city council.